Key Highlights
- While the company started the year off with a significant earnings drop from Q4 2021, Paypal Holdings Inc (NASDAQ: PYPL) has already begun to claw its way back.
- The digital payment systems provider is in line to continue an impressive earnings climb over the past four consecutive years.
The stock has a current EPS (Earnings Per Share) of $0.96 on $6.8B in sales. Analysts have rated the stock as a Moderate-to-Strong buy. The current price target is $132.21, ranging from $90.00 to $270.00.
Strong Sales Lead to Resilient Earnings
Paypal has steadily risen to its 1st June 2021 historical high of $291.48. Fortunately, both sales and earnings have been steady and stable. For instance, over the last four quarters, reported earnings beat 50% of the time and barely missed the estimate once (Q4 2021). Regardless of the hardship, gains always registered within the estimated range.
On an annual basis, earnings beat the consensus estimate of 3 out of the last four years, often at the very top of the range. Indeed, yearly sales beat forecasts in the previous two years; the two prior met the target. Then last year, 2021, reported earnings satisfied the estimates, suggesting that sales have always been good while the share price plunged.
Paypal Outperforms in A Tight Industry
Though Paypal share value is down by -$0.58 in the last year, sitting in the bottom 10% of the stock’s 52-week range, competitors of Paypal are not faring much better.
Intuit Inc is one of the financial management companies. Paypal has a higher upside compared to Intuit (59.80% vs. 35.20%) and more significant projected earnings growth (28.37% vs. 16.43%).
Intuit has a higher P/E ratio (54.82) compared to Paypal (47.37). It has Return on Assets (RoA) more than double that of Paypal (9.93%). Both report similar Return on Equity (RoE), around 16.6%, but Paypal’s Price-Sales Ratio (P/S) is a third that of Intuit (8.92).
Intuit’s 1.19 beta means it is only about 19% more volatile compared to the S&P 500, which is half as volatile as Paypal.
